Independent Bookstores: How To Compete With Amazon

If you’re reading this, you’re probably at least tangentially aware of what happens among readers, writers, publishers, and booksellers when someone says the word “Amazon.”

People get emotional. Of course, Amazon’s Kindle has revolutionized the booming e-book market over the past few years, and you can obsessively check your sales against that crappy no-good Billy Collins any time you want, but now there’s also this new mobile app that allows would-be patrons to scan a book on the shelf of their local retailer to check its price against Amazon’s offering. Not only that, but Amazon initially gave customers who used this “service” a $5 discount off their next purchase for carrying out this free-market espionage in their competitors’ physical stores.

Both articles generated passionate debate about whether Amazon’s move amounted to corporate bullying that undermined local commerce, or whether it empowered readers in a struggling economy to support as many authors as possible through rock-bottom prices. Tangentially, the debate also revolved around whether readers should altruistically support independent bookstores by agreeing to pay higher prices, or act as any other savvy consumer would and hold out for the best bargains. As an author, a publisher, a consumer, and a former indie bookstore employee myself, I found both articles provocative, to say the least. However, my critique was directed not at Amazon, but rather at the independent bookstores that I treasure so fiercely.

Why?

Because in order to survive, bookstores must stop trying to compete with Amazon.

I should pause here to clarify that when I use the word “bookstore,” I mean “independent bookstore.” Considering that barely any bookstore chains are left standing, this should be fairly apparent—but just in case any of you might think I’m talking about the few remaining Barnes & Noble or Borders megastores that still rise like brick-and-mortar colossi over the exurbs, I’m not.

It’s perhaps telling about the divide over this issue that Slate’s pro-Amazon article appeared in its Technology section and was penned by a technology columnist (and nonfiction author), while the New York Times’s anti-Amazon piece was an op-ed written by a Pulitzer Prize–winning novelist (who consulted with several other novelist friends before writing it). The simple fact is that even if all the bookstores in the country formed some sort of improbable coalition designed to undermine Amazon’s hold on the market, an IndieBound on steroids, they would fail.

Amazon has a dynamic infrastructure with relatively low overhead that not only capitalizes on the latest technological developments but has begun driving them as well. Some market analysts speculate that Amazon sales will account for 50 percent of all book sales in the US by the end of 2012, which is stunning since book-selling has actually become the minority revenue stream for Amazon now that the company has branched out into a market for everything from video games to sex toys. Amazon has become a primary competitor not just to Barnes & Noble but also to Walmart, eBay, Apple’s iTunes, and even Netflix.

Amazon’s influence has allowed it to position itself not only as the largest bookseller in the country but also as a distributor. This means that it has effectively cut the middleman out of publishing, allowing it to offer books to the reader at the lowest price while paying the publisher a larger percentage of the sales. For me as a publisher, this means that not only can you get the latest title from my press, Black Ocean, for less from Amazon, but my little indie press will also probably make more off that purchase than if you had bought it at your local bookseller.

(QUICK PRIMER: Amazon pays 45 percent of cover price to publishers through its Advantage program. Bookstores typically pay 60 percent of cover price, but then many distributors (who broker the sales between publishers and bookstores) take anywhere from 20 to 50 percent off what’s left from that. Consequently, our profit on a book sold to Amazon will be roughly $2 per book, while it’s closer to $1 when sold through the older publisher-distributor-bookstore model. Meanwhile, our profit is closer to $7 if you buy books directly from our website—so if your primary concern is supporting the people who produce the books you love, you should consider buying directly from the publisher as an alternative.)

So if Amazon offers books for less to the consumer, and the publisher turns a higher profit for each book sold, why even have bookstores at all? Because in the 21st century, the service a bookstore provides isn’t just book-selling; it’s being the cultural center that book lovers need in their communities. Unless bookstores can not only acknowledge their role as beacons of culture, but really embrace that role and market themselves as such—as long as they try in vain to compete with one of the world’s largest retailers at its own game—they will slowly lose ground as they steadily morph into increasingly bizarre hybrids of book-music stores, bookstore-cafes, and bookstore–tapas restaurants, until they simply become businesses that sell the latest quirky breakout novel on the side to customers who’d rather pay $15 for a sandwich and a cup of coffee than for a book.

Every publisher and editor I know bitterly jokes about how she “didn’t get into this business for the money.” I know most booksellers feel the same way, though when what little money you were making starts to disappear it’s hard to remember that. But it’s the very act of remembering that will help guide bookstores toward staying relevant and successful in the age of Amazon and e-books. If all you want to do is sell something for a profit, then the book business is one of the last places you should be working. But if what you want to do is promote a love for reading and the books you love to read, then you can begin transforming your store into a valuable resource for other people who share your passion.

Here in the Boston area, two bookstores have managed to not only survive but thrive: the Harvard Bookstore (not affiliated with Harvard University) in Cambridge and Brookline Booksmith in Brookline. These two stores have a few elements in common that have undoubtedly contributed to their lasting success:

In addition to new books, they also sell a great selection of used titles at lower prices.

They have robust websites that offer options to buy online with quick local delivery (the Harvard Bookstore even offers next-day delivery by bicycle to select areas) as well as blog posts and features.

They have interesting and revelatory staff selections.

They each host over 100 readings a year (Brookline Booksmith hosts around 150, and Harvard Bookstore is closer to 300).

Both stores have been enthusiastic with their response when approached by Black Ocean to sell our titles.

It’s the last three points that I’d like to elaborate on.

In his Slate article, Manjoo states somewhat obtusely, “Amazon suggests books based on others you’ve read; your local store recommends what the employees like. If you don’t choose your movies based on what the guy at the box office recommends, why would you choose your books that way?” Of course, anyone who actually shops at bookstores knows this argument holds no water. When I enter a bookstore, the staff selections are usually the first or second section I go to (after I browse the sale items, of course…). A well-read staff that can anticipate their customers’ interests are one of the greatest assets any bookstore can have.

To illustrate this point, I’ll use an example from my own life. I was reading online the other week when I came across a new book out from a new indie press called Siglio in Los Angeles: an art book of religious paintings from Rajasthan, selected and compiled by the French poet Franck André Jamme, called "Tantra Song." It was late at night and I knew I had to have it right away, so of course I immediately navigated to Amazon to check out the book’s price and availability. Much to my chagrin, it was out of stock and available only from a third-party seller for the astronomical price of $300.

I promptly navigated to the website of the publisher, which also admitted that the book was out of stock, but generously provided a list of bookstores that might still carry it. Scanning the list for stores in Massachusetts, I saw that one of my favorite new resources for wonderful art books, Guy Pettit’s Flying Object out near UMass Amherst, was on the list. I went directly to Flying Objects’ website, saw that it had one copy left, and picked it up for $40 plus $2 shipping and handling. Since then Amazon has promised to have it in stock by mid-January, and is of course selling it for $14 less than what I paid for it—but in my hour of need, it was Guy Pettit’s visionary selection that came through and earned my business. I have no regrets about paying the full cover price and, to debunk another of Manjoo’s specious arguments, spending those 14 “extra” dollars isn’t going to prohibit me from buying more books I want in the future.

An expertly managed selection of books may be great, but it’s still useless unless you can actually get customers to look at what you’ve got in the first place. This is where the almighty in-store event comes into play, and it’s really at the heart of what distinguishes a bookstore from an online retailer, what makes a bookstore a center for culture in its community, unlike a Walgreens.

Lorem Ipsum Books in Cambridge provides an interesting case study. It was started by book lover and tech prodigy Matt Mankins. As Mankins tells it, he basically started the bookstore as a sandbox for software programs he was building to make his small store competitive in a global arena online while still selling through a brick-and-mortar store locally. He designed a program that, with a few clicks, scans in a title and automatically sets a competitive price based on what other used-book retailers are selling it for online. Another click, and the store’s copy goes up for sale alongside the competitor’s copies on numerous sites (such as Alibris, AbeBooks, and, yes, Amazon) at the programmed price. This system carried Lorem Ipsum along for seven years, while Mankins’s eclectic collection earned the store adoration from its local clientele.

But the store isn’t located along one of Boston’s subway lines, so it doesn’t enjoy the same citywide patronage that other more prominently located bookstores do. At the same time, Lorem Ipsum has close to 3,000 square feet of floor space, with handmade bookshelves and a jaw-droppingly high antique tin ceiling—in other words, it’s a very cool place to have a reading. So when an art gallery in Harvard Square that had become the go-to event space for Black Ocean closed its doors for good a little over a year ago, I approached Lorem Ipsum about doing an event there. Mankins had moved to New York at this point, but left a young and energetic staff in place that was eager to get a series going in the store. We booked our best-selling author, Zachary Schomburg, for his Boston appearance there, and close to 40 people showed up. Perhaps only 10 or 15 of those 40 people actually bought books that night, but since then more and more poetry readings have been booked there, along with album release parties for local indie bands and art openings for local visual artists. Over the past year, through some dynamic programming, Lorem Ipsum has started to become a real presence in the larger community, and Mankins says that since the push to have more events, their overall sales have improved too.

Is a store like this going to be run out of business by Amazon’s new app? Not likely.

A number of stores across the country fit similar profiles: RiverRun Bookstore in Portsmouth, New Hampshire, hosts around 150 readings annually, and their staff selections are celebrated by readers all the way down in Boston; Prairie Lights in Iowa City is also known for its readings, which it even streams online; Magers & Quinn in Minneapolis has close to 150 readings a year and boasts a small but exciting rare and antiquarian collection alongside its new and used titles. All these bookstores have one more thing in common: they have sold (and currently stock) one or more of Black Ocean’s titles.

Now, clearly the handful of Black Ocean books these stores sell each year doesn’t make a hair’s difference for their bottom line, but their presence on the shelves speaks to the store’s interest in, and support of, independent publishers—more specifically, poetry—and the customers who read those books. People who read poetry are the unsung customer base for independent bookstores: they are avid readers, they love books as physical objects, they will religiously attend author readings, they read books on a variety of subjects, and they buy more books annually than anyone else I know. By catering to the type of person who reads poetry, these successful bookstores have perhaps unwittingly remained focused on what devoted patrons of bookstores really value: variety over homogeneity, literature over media, humanity over technology, and community over price. By being the type of bookstore that poetry readers will go out of their way to visit, and by being a third place in our social lives that fosters community and human interaction, these stores have become—through the nuanced fact of their physical being—something that Amazon, by its very business model, is the antithesis of: a space where we experience history, and thus also time.

At first glance, the idea of “catering to poetry” may seem like a hard sell. After all, “no one reads poetry anymore,” and the truth is no one ever really did. Poetry books will remain a paltry portion of the market for a long time, but the people who read poetry will continue to spend hours browsing the aisles of their local bookstore—smartphones tucked quietly away in their coat pockets. If bookstores can learn to embrace these odd readers as secret representatives of the type of person who’s at the core of their customer base, rather than get sucked into a doomed downward spiral of price slashing on the latest best-selling hardcover, they will remain relevant and attractive to the customers they need in order to survive. Poetry, the least profitable and most esoteric of all the genres, can save the bookstore.